Insurance Businesses Can Save Money Now by Automating Their Compliance Management

Producer licensing and compliance management is both a hassle and an expense for all types of insurance businesses. Switching to a real-time, integrated, and automated compliance management solution can take the headache out of producer licensing, renewals, and appointments. Plus, it can turn an expense into an opportunity for cost-savings.  

In this article, we’ll take a look at:

• The pain points of manual compliance management 
• How these pain points ultimately cost insurance agencies, carriers, and MGAs time and money
• How switching to a real-time, integrated, and automated compliance management solution can save time, money, and your team’s sanity

For a long time, the insurance industry chugged along the “business as usual” track without a whole lot of change, especially when it came to technology. Some early adopters explored automated solutions pre-2020, but the pandemic caused a seismic shift in the way insurance agencies and carriers leveraged technological solutions in their business processes. 

The pressure to adapt to modern challenges, along with the realization that legacy technology may be doing more harm than good, has launched the insurance industry into a technological reckoning as organizations search for modern solutions to address modern challenges. Insurance businesses of all sizes, from the smallest independent agencies to the largest insurers, are all looking for new ways to both optimize their processes and realize cost-savings. The way to do this often includes updating their tech stacks to include automated solutions. 

But overhauling legacy systems isn’t a simple undertaking. Making such a big change is daunting, time consuming, and costly. It makes sense why some insurance businesses choose to put it off for so long, especially if it seems like their current (i.e. old) way of doing things works “well enough.”  

But do they really?

When weighing your options between keeping things as they are and radically transforming operations to a modern way of doing things, it’s important to consider how much what you’re doing now actually costs. From regulatory penalties for compliance violations to wasted hours in your staff’s time each day, doing nothing doesn’t cost nothing.

Manual producer licensing and compliance management is no small task

Producer licensing can be a sharp thorn in the side of any insurance business still managing the process by hand, or with a vendor or technology that isn’t ideal. 

Getting producers onboarded and ready to sell, getting them appointed, validating licenses, conducting background checks, initiating nonresident state licenses, and more are already challenging tasks. They get exponentially more complicated for insurance businesses that deal with a large number of up- and downstream distribution channel partners. 

Keeping up with producer data along with ever-changing state regulatory requirements can make it impossible to scale your business without ballooning your operational headcount and budget. Just think of the multiple system logins, unnecessary down time, redundant data entry, and of course: So. Much. Paperwork.

These pain points can lead companies to avoid compliance management entirely. That is, until they are slapped in the face with compliance audits. Even those that do manage to stay on top of manual producer licensing face costly delays and missed deadlines as a result of  manual errors. 

How automating compliance management can create cost savings

An automated compliance management solution can help reduce many of the costs associated with manual producer licensing and appointment processes by eliminating compliance-related complexity in your workflows. There are four major buckets these cost-savings can fall into: reducing regulatory risk, confidently taking advantage of Just-in-Time appointments, adding efficiency into your producer onboarding workflows, and reducing time spent on manual, low-value activities. 

While we’ll focus on these four categories, we can’t ignore other benefits of modernizing producer compliance, such as creating a modern and hassle-free producer experience, and effortlessly ensuring compliance at every step of the producer lifecycle. 

Reduce regulatory risks 

The onus of producer licensing compliance is a shared burden between each member of the insurance distribution channel. An automated compliance management solution minimizes human touch in your workflows and gives carriers, agencies, and MGAs full visibility into the status of each producer’s license. This helps ensure accurate compliance and minimize the risk of costly regulatory violations. 

Integrating compliance checks directly into automated workflows – Imagine having effortless compliance verification before, during, and after a producer sells business. You’ll never worry about paying out a commission to a producer who falls out of compliance, or missing a Just-in-Time appointment you meant to process, but dropped because a sale fell through the cracks. Built-in compliance checks like these give everyone peace of mind that you’re doing everything you can to avoid the financial and legal costs of compliance missteps.  

Automating ongoing compliance checks with an electronic “paper trail” – Your compliance process may be automated, but that doesn’t mean it’s a black hole your team can’t look into. Automating compliance should include automatically creating records you can audit. You’ll minimize human touches while also ensuring accuracy and the ability to verify compliance every step of the way. 

Leverage Just-in-Time appointments

If you’re a carrier working across multiple states, you could be wasting thousands of dollars in appointment fees for agents who will never actually write business in those states. AgentSync’s compliance management solution provides real-time state regulatory updates that give you the ability to leverage Just-in-Time (JIT) appointments in a few key ways.

Only pay for appointment fees when an agent writes business –  If your organization is in the habit of onboarding a bunch of producers across multiple states and then immediately submitting appointments to every state, you could be spending money to appoint thousands of agents who never bring in a single dollar of revenue. With an automated compliance solution, you can onboard producers faster than ever, but wait to pay for appointments until the producer actually writes business in a particular state. 

Never miss your window of opportunity for a JIT appointment – With manual processes, it’s much easier to overlook the timeline for a JIT appointment, especially since those timelines vary from one state to another. An automated compliance management solution will help you stay on top of deadlines with real-time data integrations and timely alerts. 

Add efficiency into producer onboarding workflows

If you’re interested in providing a world-class producer experience (and let’s be honest, those that don’t will struggle to find and keep talented producers in the coming years), then automating and streamlining the producer onboarding experience is vital. 

You can stand out from the pack, become an agency or carrier of choice for your top distribution partners, and increase revenue production by decreasing onboarding times and getting producers ready to sell faster than ever. 

Onboard producers with speed and ease – It’s not an exaggeration to say that some agencies need months to get a new producer ready to sell. Even those with some sort of technology in place already can find it takes multiple weeks of phone or email-tag, and several rounds of submitting paperwork to states, before everything required is complete and the producer is ready to sell.  With always-up-to-date data drawn directly from the industry’s source of truth on a daily basis, it’s possible to get producers started within just a couple of days by cutting out redundant data entry and ensuring compliance every step of the way.

Become a preferred distribution partner – With best-in-class compliance controls, you’ll gain the competitive advantage you need to build a strong reputation and continue to grow your business with new up- and downstream distribution partners. 

Reduce manual, low-value activities

Stop paying your people for time-consuming tasks like manual data entry. We’re not talking about replacing your people with an automated solution. We’re talking about using technology to enable your team so they can stop entering and re-entering the same data and start focusing their efforts on more high-value work. By doing so, you can reduce the costs associated with manual work including:

Wasted human effort that’s also prone to error – The more human hands you have in your workflows, the more prone to costly human error, oversights, and omissions your processes are. Taking your talent out of repetitive tasks like data entry with the help of automation not only reduces your risk for human error but also allows staff to get back to more revenue-generating tasks like supporting sales and client retention.

Security risk from unstructured data – Emails, spreadsheets, paper files. These types of unstructured data are common in manual processes and have a couple major drawbacks. For starters, unstructured data is less efficient and less accessible, often requiring large amounts of tedious digging and cross-referencing to find what you’re looking for. Another major drawback is its security risk. The more unstructured and disorganized your records are, the harder it is to protect them.  

Compliance management is complex, but it doesn’t have to be costly

Adding automation into your compliance management process can enable your business to reach new levels of efficiency, productivity, growth, and even profitability. By taking employees out of manual, repetitive processes with an automated compliance management solution, you can eliminate key pain points in the producer onboarding, licensing, appointment, commission paying, and renewal processes. At the same time, you reduce the chances of costly oversights and compliance violations.When it comes to introducing automated solutions to your organization, compliance management is just the beginning. If you’re ready to tip the scale of your organization’s manual processes from cost-heavy to cost-saving by baking automation into every workflow, see how AgentSync can help!